Sign In

Or Sign In With

Create an account

or

** All fields required

Please leave all of these values empty to help us distinguish humans from robots.

Personal EmailPersonal Phone

Business EmailBusiness Phone

Yes, I would like to receive emails and other electronic communications from Century 21 Canada Limited, doing business as CENTURY 21, about products, services, events and other exciting and educational updates in the real estate industry. You can withdraw your consent at any time. If you have questions, you can contact us at 700 - 1199 West Pender St., Vancouver, B.C., V6E 2R1, or at corporate@century21.ca. We will treat the information you provide in accordance with our Privacy Policy.

Reset Your Password

B.C. Residents Have Unrealistic Hopes of Shedding Debt, Poll Finds

This article appeared on The Vancouver Sun and was written by James Kwantes on August 29, 2011.

B.C. residents have high hopes of retiring debt-free, but for many, this reality show has an unhappy ending.

While most B.C. residents believe they’ll be debt-free by age 58, fewer than one-third of B.C. residents aged 45 to 64 don’t owe any money, according to a Harris-Decima poll conducted for the Canadian Imperial Bank of Commerce.

About one-quarter of B.C. residents report that they’ve abandoned hopes for a debt-free retirement. Fourteen per cent believe they will pay off all debts in their 70s and one in 10 says they will never be debt-free, the poll found. That compares with only four per cent of Alberta residents who believe they’ll carry debt into their 70s.

Part of the problem is that many Canadians who have a financial plan don’t factor in their debts, said Mike Stevenson, CIBC senior vice-president, Western Canada. For example, polling shows that about three in five Canadians meet with a financial planner to talk about financial goals and retirement strategy, but only one in five incorporates a debt repayment plan into that strategy.

“Many people lack a comprehensive and cohesive plan or strategy,” he said.

On the bright side, 37 per cent of all B.C. residents are debt-free, compared to 21 per cent nationally, the poll found.

The trend of more British Columbians carrying debt into retirement is one that Scott Hannah, president and CEO of B.C. Credit Counselling, has noticed.

People have a higher tolerance for debt because interest rates are very low, Hannah said. Compounding the problem, many are unwilling to make the hard choices required to dig themselves out of debt.

“People have to make some sacrifices, and the more severe your financial situation is, the bigger the sacrifice you’re going to have to make,” Hannah said, using the example of a cash-strapped family going from two cars to one.

“But none of us wants to give up what we have.”

The poll showed that people tended to predict they would have all their debt paid off 10 to 15 years from now. For example, those 18 to 24 picked 32 as the average age for being debt-free, those 25 to 34 said 44, people 35 to 44 said 54, 45- to 55-year-olds said 60, and 55- to 64-year-olds said 65.

Rob Abboud, an Ottawa-based financial planner with Raymond James, said many people underestimate the effect of 30-year amortizations, consumer debt, their children’s education and various things that can come up, such as buying a new car.

Hannah advocates setting up a financial plan that involves debt repayment and retirement savings coming out of the account first.

“What you’re probably going to find is that the amount of funds that a person has available for discretionary spending is somewhat limited,” he said. “But at least you’re taking care of your financial goals and those things that are most important to you first, as opposed to doing it after the fact.”

Many homeowners who are mortgage-shopping still ask how much they can get instead of how much they can comfortably afford, he pointed out. “For a lot of people who put themselves into a tight spot, it makes it difficult to get ahead,” he said.

It’s not only expensive real estate that has British Columbians cash-strapped.

One in five B.C. residents who responded to an ING Direct survey released Monday said their biggest monthly expense — besides mortgage or rent payments — was loans and credit card payments, compared to 16 per cent nationally. Half of B.C. respondents reported that they could not afford to save $25 more per week.

Contact Me

Century 21 Canada Limited Partnership currently has franchise opportunities available in select markets across Canada. The intent of this communication is for informational purposes only and is not intended to be a solicitation to anyone under contract with another real estate brokerage organization. CENTURY 21® is a registered trademark owned by Century 21 Real Estate LLC, used under license. ® Trademarks of AIR MILES International Trading B.V. Used under license by LoyaltyOne, Inc. and Century 21 Canada Limited Partnership.

Certain listing content on this website has been provided by The Canadian Real Estate Association. The compilation of such Listing Content is owned by The Canadian Real Estate Association and/or its member Boards and Associations and licensed to Century 21 Canada Limited Partnership.